Course Outline 2018

ECON 212: GAME THEORY (15 POINTS)

Semester 2 (1185)

Course prescription
An introduction to the fundamental concepts of non-cooperative and cooperative game
theory: the concept of strategy; two person constant sum non-cooperative games and
the minmax value; n-person non-cooperative games and Nash equilibrium; examples
and applications in auctions, bargaining and other economic models, political science
and other fields; the idea of backward induction and sub-game perfection; introduction
to games in coalitional form; the core and the Shapley value.

Course advice
Prerequisites: ECON 101 Microeconomics or ECON 191 Business Economics or MATHS 108
General Mathematics 1 or MATHS 150 Advancing Mathematics 1 or MATHS 153
Accelerated Mathematics or PHIL 101 Introduction to Logic.

Goals of the course

Students will be introduced to the basic concepts and taught to analyse simple
examples. Emphasis will be very much on basic understanding rather than formal
statements of results. Some formal definitions will be examined, but only after a
thorough examination of the concepts in the context of examples.

Learning outcomes (LO)

# Learning outcome Graduate profile capability*

LO1 Understand basic issues in theories 1. Disciplinary knowledge and practice

of strategic decision-making

LO2 Explain how to recognise strategic 1. Disciplinary knowledge and practice

situations and represent them as
games

LO3 Solve simple games using various 3. Solution seeking

techniques

LO4 Analyse various economic 2. Critical thinking

situations using game theoretic
techniques

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 # Learning outcome Graduate profile capability*

LO5 Understand, through a basic 1. Disciplinary knowledge and practice

introduction, the more formal
aspects of the theory

* See the graduate profile this course belongs to at the end of this course outline.

Content outline
Relevant learning Assessment
Week / Module Topic
resources/activities due this period

Week 1 Historical Introduction

Basic Concepts, and

Week 2
Terminology

Week 3 Normal Form Games

Zero-sum Games and

Week 4 Assignment 1
the Minmax Value

Week 5 Equilibrium

Week 6 Extensive Form Games Test

Information Sets and

Week 7
Perfect Information

Week 8 Perfect Recall Assignment 2

Backward Induction and

Week 9 Subgame Perfect
Equilibrium

Week 10 Coalitional Games

Week 11 Core

Week 12 Shapley Value Assignment 3

Learning and teaching

This course will be taught in the second semester. There will be 3 hours of lectures per
week.

Teaching staff
Associate Professor John Hillas
Office: OGGB 6111
Tel: 923 7349
Email: j.hillas@auckland.ac.nz

Learning resources

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There is no prescribed text for this course but comprehensive notes on the material will
be provided in a Coursebook and electronically on the Class web page. For students who
would like a text to accompany the course, the following is recommended:

Recommended Text: Avinash Dixit and Susan Skeath, Games of Strategy, W.W. Norton
and Company, 2004. (2000 version is also useable.)

Assessment information
Group and/or
Assessment task Weight % Submission
individual
Assignment 1 5% Individual In class; Date TBA

Assignment 2 5% Individual In class; Date TBA

Assignment 3 5% Individual In class; Date TBA

Test 25% Individual Exam conditions

Exam conditions; Final
Final Exam 60% Individual
Exam period

Pass requirements
Students who obtain at least 50% of the marks will pass the course.

Description of assessment tasks

Learning outcome to
Assessment task
be assessed
Assignment 1 Problems from the material up to Week 4 LO1 – LO5

Assignment 2 Problems from the material up to Week 8 LO1 – LO5

Assignment 3 Problems from the material up to Week 12 LO1 – LO5

Test will cover the material taught up until the end of the week
LO1 – LO5
previous to the week in which the test is given.
Final Exam is comprehensive. Slightly more weight will be
LO1 – LO5
placed on material not covered in the Test

Inclusive learning
Students are urged to discuss privately any impairment-related requirements face-to-
face and/or in written form with the courses convenor/lecturer and/or tutor.

Academic integrity
The University of Auckland will not tolerate cheating, or assisting others to cheat, and
views cheating in coursework as a serious academic offence. The work that a student
submits for grading must be the student’s own work, reflecting his or her learning.
Where work from other sources is used, it must be properly acknowledged and
referenced. This requirement also applies to sources on the worldwide web. A student’s

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assessed work may be reviewed against electronic source material using computerised
detection to provide an electronic version of their work for computerised review.

Student feedback
Student feedback is encouraged in this course. During the semester, students may
directly submit their feedback to the lecturer through a face-to-face appointment, or
they may wish to submit feedback through the class representative.

At the beginning of each semester, you will select one or more class representatives for
the paper. The role of the class representative is to gather feedback from students in the
course and bring this to the lecturer and/or the Department. Class representatives’ email
addresses are posted on Canvas and you are encouraged to contact them with feedback
relating to the course. You are also welcome to talk to the class representatives in
person.

Class representatives also submit feedback to the Department of Economics Staff

Student Consultative Committee (SSCC), which meets up to three times per semester to
gain feedback regarding the course. Only class representatives may attend the SSCC
meetings, and they will ask the class for feedback before the SSCC meeting.

At the end of the semester, you will have the opportunity to submit an evaluation of the
course in a formative feedback questionnaire. We strongly encourage you to take part in
this evaluation process.

In the event of an unexpected disruption

We undertake to maintain the continuity and standard of teaching and learning in all
your courses throughout the year. If there are unexpected disruptions, the University
has contingency plans to ensure that access to your course continues and your
assessment is fair, and not compromised. Some adjustments may need to be made in
emergencies, In the event of a disruption, the University and your course coordinators
will make every effort to provide you with up to date information via Canvas and the
University website.

Graduate profile for BCom

The following six themes represent the capabilities that the Business School seeks to
foster in all of its graduates. The development of these capabilities does not come all at
once, but rather is expected to build from year to year. Each course is not expected to
contribute to all capabilities, but each course will have its own goals and learning
outcomes that relate to the overall development of this profile.

1) DISCIPLINARY KNOWLEDGE AND PRACTICE - Graduates will be able to demonstrate

and apply a breadth of knowledge across disciplines, as well as specialist knowledge
within one or more of them, while recognising the relevancy of this knowledge within a
global context

Disciplinary knowledge and practice

2) CRITICAL THINKING - Graduates will be able to analyse and critique theory and
practice to develop well-reasoned arguments
Critical thinking

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 3) SOLUTION SEEKING - Graduates will be able to identify and frame problems using
analytical skills to create and evaluate innovative solutions.

Solution seeking

Quantitative reasoning

4) COMMUNICATION AND ENGAGEMENT - Graduates will be able to collaborate and

communicate effectively in diverse business contexts using multiple formats.
Oral communication

Written communication
Engagement

5) INDEPENDENCE AND INTEGRITY - Graduates will be able to respond professionally

and ethically, demonstrating a capacity for independent thought and learning.

Independence

Integrity

6) SOCIAL AND ENVIRONMENTAL RESPONSIBILITIES - Graduates will recognise the

significance of the principles underpinning the Treaty of Waitangi and consider their
obligations in relation to sustainability, whilst displaying constructive approaches to
diversity.
Social responsibility

Environmental responsibilities

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